Climb the mountain of digital transformation
Financial service providers are still too quick to take the tunnel
If you go down to Switzerland or Italy, you will most probably go through an Alpine tunnel. That is quicker, more comfortable and safer than the winding roads across the mountains. But you do miss something: amazing views and surprises behind every bend.
The financial sector loves tunnels. Come on, head towards the future, it’s straight ahead. But if you only look ahead and don’t look at what’s happening next to you and behind you, you miss out on opportunities. I see that with many companies. They spend too much time on themselves and too little time on what their clients want, or looking at which opportunities they could deliver to other markets. And once you arrive at the other side of the tunnel, you could end up without warning in a completely different landscape than you expected.
That’s why I want to list a number of trends that could change the financial sector dramatically and demonstrate why it’s so important to keep looking around you carefully.
The financial market is changing – and how!
Everyone knows by now that consumer expectations are higher than ever. The customer experience must be ‘frictionless’, to use the buzzword in the commercial sector. It’s a nice way of saying that the services for consumers must be as easy and quick as possible. Signing documents in triplicate and having to go to a branch to open an account is unacceptable nowadays. And if you’re already waiting in the queue for the terminal at Schiphol, you must be able to take out travel insurance quickly too.
Consumers have been thoroughly spoiled in recent years, particularly by innovative tech companies. It’s precisely those parties, which the financial sector should be watching most closely. Google and Amazon are payment processors now and active in the insurance world. At present, many tech companies still act primarily as digital facilitators or distribution partners for insurers. However, with their gigantic quantities of data and analysis and distribution capabilities, they can also take over the baton from traditional insurers completely.
Tech companies are extremely adept at looking around and discovering opportunities in new markets. They are more flexible therein than the ‘old guard’ in the industry. They are not held back, for example, by legacy processes and systems – an advantage that shouldn’t be underestimated. Because they don’t have to maintain outdated systems, they can spend much more time on innovation. For companies that have organised their services in the same way for decades, change is considerably more difficult.
However, it’s essential to make those efficiency improvements for the sake of competitiveness. Not only because legacy systems are expensive to maintain, but also to create breathing space and to broaden one’s horizons.
If the establishment can make those efficiency improvements, they will be left with more time to use the mountain of data at their disposal for innovation. Apart from a few players, data is still used too little by insurers and banks, in spite of the added value. That’s also the difference compared to the tech industry. It is precisely that focus on data which enables the Googles and Amazons of this world to enter entirely new markets. They know precisely what’s happening before they establish a presence.
Climb until you reach the clouds
Returning to my metaphor: tunnel vision is fatal to one’s competitive ability. Competition can come from unexpected corners, and like a bolt out of the blue. With legacy systems, you will never be flexible enough to anticipate and respond to surprises.
One obvious step is the step to the public cloud. The functionality that is embedded in large public cloud providers relieves you of an awful lot of maintenance and enables you to focus completely on developing applications that support your services.
Solvinity can help you with that. We have built a development infrastructure – feel free to call it a path through the mountains – with which ongoing software can be rolled out in a safe manner. We guarantee that safety through our strict observance of compliance guidelines. For example, we are the only managed service provider in the Netherlands that is SOC 1 and SOC 2 certified for the Microsoft Azure public cloud.
Digital transformation is hard work, but rewarding. With Solvinity as your guide, you will reach the top more easily and safely.